Push for Clearing Business Planned by N.Y.'s Weiss Peck

Weiss, Peck & Greer Investments isn't a name that comes up often when bank brokerages consider choosing an investment clearing firm.

The New York-based firm is best known for its investment management acumen. But it also provides clearing services for 50 small brokerages, investment firms, and foreign banks.

Francis H. Powers, the firm's chief operating officer, said he wants to attract business from U.S. banks by offering "more detailed and tailored services than they can get from the major players" and by leveraging the firm's alliances with technology companies.

Jay C. Nadel, principal, said the firm's business plan calls for it to have up to 100 clients within three to five years.

"Banks have not been able to cost-justify doing their own clearing," Mr. Powers said in a recent interview from his office overlooking New York Harbor.

That may be true, but Weiss, Peck & Greer faces a tough challenge from such heavyweight clearing firms as BHC Financial, Pershing, National Financial, and Stephens Inc., which together have a lock on more than 50% of the market.

Mr. Powers said the firm is close to signing an agreement to clear for a large Southern regional bank that currently has its own clearing unit. He would not disclose the name, but industry observers speculate the client could be First Union Corp. or Wachovia Corp.

Ellen Sartin, a senior vice president at Wachovia Investments Inc., said the company has been clearing investments on its own since 1985 and is not considering hiring an outside firm to handle it.

A spokesman for First Union, which is self-clearing, also refuted the speculation.

Dina Elliott, a principal for Optima Group, a Fairfield, Conn., consulting firm, said she has doubts that banks will warm up to Weiss, Peck & Greer, because the firm is much smaller than its competitors.

"In this business, we wouldn't advise banks to look at small firms," she said.

Ms. Elliott added that clearing is a volume business that "needs large capital infusions, because the commitment to technology is huge. The industry is modernizing extremely rapidly."

Weiss, Peck & Greer's Mr. Powers said the firm is confident it can service all of its clients' needs, because it has a strategic alliance with ADP Corp., the giant information systems and services company, which provides Weiss, Peck & Greer's computer systems.

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